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Calgary real estate market

Davidackerman

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Here's s story from the WSJ
Capital of Canada’s energy sector suffers more than other big oil cities like Houston



ENLARGE

In Calgary, March home sales volume tumbled 11% from the same period last year.PHOTO: LYLE ASPINALL/QMI AGENCY/ZUMA PRESS

ByLAURA KUSISTO andRITA TRICHUR

Updated April 5, 2016 4:53 p.m. ET


2 COMMENTS

The housing market in Calgary, capital of Canada’s struggling energy sector, has been hit so hard it makes the challenges faced by U.S. oil towns look relatively mild.

March home sales volume tumbled 11% from the same period last year, according to the Calgary Real Estate Board. Some 2,000 miles to the south in the headquarters of the U.S. oil industry, Houston, home sales were up 2% in February—the most recent data available—compared with the same month last year, according to the Houston Association of Realtors.

In Calgary the slowdown also has been felt by a wider range of homeowners. In Houston most of the pain so far is being felt among sellers of high-end homes priced at $500,000 and above—a sector that saw a 12% decrease in sales volume in the year ended in February.

Until recently, this was also true in Calgary. The slowdown had been more or less confined to high-end homes worth C$700,000 (US$534,800) and higher.

But now that trend is playing out in lower price ranges as well, especially in the C$500,000 to C$600,000 range, which includes the majority of the detached homes, according to Ann-Marie Lurie, chief economist with the Calgary Real Estate Board.

Meanwhile, brokers in Calgary are reporting that sellers have been offering a wide range of incentives to buyers, including a Tesla in one case. Many prospective buyers are retreating to the sidelines in that city, brokers say.

“I haven’t got a buyer in real estate right now who isn’t petrified to even buy,” said Keith Crawford, a Calgary-based realtor with Century 21, adding buyers aren’t sure if prices have hit a bottom.

Calgary’s housing market is suffering more partly because this city of about 1.2 million people has a less diversified economy than Houston. Also, Canada’s economy overall also is still vulnerable to a slowdown right now, while the U.S. economy remains strong.

Finally, Calgary’s oil industry is more dependent on a pricey method of extraction that is more vulnerable to a drop in oil prices. “We are a higher-cost producer area. And we can see it with these lower [oil] prices. It really has translated into significant amount of layoffs,” said Ann-Marie Lurie, chief economist with the Calgary Real Estate Board.

Natural-resources employment in Alberta, the province that includes Calgary, decreased by 7,400, according to the Alberta Treasury Board and Finance, helping bring the unemployment rate to 7.9%—the highest in two decades.

By contrast, the unemployment rate is a still-modest 4.8% in Houston, which also has employers in health care and aerospace.

Much like Houston, Calgary’s real-estate market was more deeply affected when oil prices declined during the 1980s. “In the ’80s, it was a far steeper impact because at that time, we were even more reliant on oil than we are today,” Ms. Lurie said.

THE PROPERTY REPORT


Averages home prices in Calgary have fallen nearly 5% from their high of C$491,609 in June 2014. That is still well below the 25% drop they took in the 1980s, not adjusted for inflation. Calgary’s average home price was C$468,572 in March, down more than 1% compared with the same month last year, according to the Calgary Real Estate Board.

In Houston, the average home price edged up 0.5% to nearly $261,000 in February compared with one year earlier, according to the Houston Association of Realtors.

Brokers say that the incentives being offered by Calgary home sellers indicate even a greater disparity. Their value is worth about C$3,000 to C$5,000, according to Roy Almog, founder of 2% Realty Inc., a discount brokerage.

Typically, those inducements include cash back on closing—funds that could be used to finish a basement, as an example. In other cases, home sellers dangle other goodies such as offers to pay a buyer’s condo fees for the first year.

Incentives on luxury homes have included golf memberships, but those offers have curtailed a bit. “It’s just not selling and so people, for the most part, have taken those homes off the market,” said Keith Crawford, a Calgary-based realtor with Century 21.

Mr. Crawford recently tried to sell a luxury home, listed over C$2 million, that came with an unusual perk: a free Tesla. When that didn’t work, he simply lowered the price by an additional C$250,000.

The slowdown in Calgary has rippled through the office and apartment rental markets. Calgary’s downtown office market, once the envy of landlords everywhere, has seen a reversal of fortunes.

The market has been flooded with space from companies rushing to sublease as well as new supply from towers that broke ground during headier times. This has sent the vacancy rate soaring past 17%, from less than 6% at the end of 2012, while rents have tumbled more than 30% in the same period, according to CBRE Group Inc.

By comparison, the Houston office market is also reeling from an abundance of new supply and sublease space, though rents have been more stubborn—staying relatively flat during the same period. Many local real-estate executives expect rents to fall once more landlords come to terms with the new reality.

In Houston, most analysts expect the rental market to fare the worst in the coming year because falling demand is colliding with a flood of new supply. Rent growth in Houston has slowed for 13 of the past 14 months, according to apartment-research firm Axiometrics Inc. Rents inched up just 0.7% in February, the firm said. Vacancies climbed to 6.6% from 5.8% in the same month last year.

Investment-research firm Green Street Advisors expects rents to actually decline by 1.5% this year. “We think the Houston market continues to weaken and our expectations are that it will be worse this year than most expect,” said Green Street analyst Dave Bragg.

Similarly, the apartment rental market in Calgary is also suffering from rising vacancies. Vacancy rates in rental apartment buildings in the Calgary Census Metropolitan Area rose to 5.3% in October 2015 from 1.4% in the previous year, according to the Canada Mortgage and Housing Corporation.

“The longer you have these people unemployed, the more we start to see it impact all aspects of the market,” said Ms. Lurie, of the Calgary Real Estate Board.

—Eliot Brown contributed to this article.
 

Surrealplaces

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I don't see a link to any stats on this tweet, but if true, it's good news for Calgary's high rise condo market.

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crisp

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The massive delays just proved that he gives two shits about the purchaser and what their situation is. And I get that when you buy unbuilt, there will be delays and it is a risk the purchaser takes. But when the developer tells you "construction will start in three months" when you purchase in 2013, and then continue to say the exact same thing when you ask every three months for two years straight, that's complete horseshit.
 

crisp

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I had my walkthrough on Saturday. Aside from the whole construction process delays and shitshow, I think this building will still be good quality in the end. My unit had only minor deficiencies, nothing that is making me rip my hairs out. Impressed with the size of the balcony and overall the look and feel of my unit. Garbage chute on every floor, pretty standard but I am currently living in a new building that doesn't have this so it is awesome to me.

The front lobby is about a third the size that it looks like in the renders, basically a narrow hallway with concierge desk at the entrance. The finishes however do look very nice IMO, although a bit still under construction. I managed to take a walk through the amenity floor as well, still under construction. Again, more narrow than in renders but is very long and the finished touches are looking good. The outside amenity terrace is really nice and pool seems like it will be larger than I thought. Am also told will be a heated pool so that is nice. Fitness room is a good size as well.
 

zerileas

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I had my walkthrough on Saturday. Aside from the whole construction process delays and shitshow, I think this building will still be good quality in the end. My unit had only minor deficiencies, nothing that is making me rip my hairs out. Impressed with the size of the balcony and overall the look and feel of my unit. Garbage chute on every floor, pretty standard but I am currently living in a new building that doesn't have this so it is awesome to me.

The front lobby is about a third the size that it looks like in the renders, basically a narrow hallway with concierge desk at the entrance. The finishes however do look very nice IMO, although a bit still under construction. I managed to take a walk through the amenity floor as well, still under construction. Again, more narrow than in renders but is very long and the finished touches are looking good. The outside amenity terrace is really nice and pool seems like it will be larger than I thought. Am also told will be a heated pool so that is nice. Fitness room is a good size as well.
Sorry, had to make an account just to reply to this, as my experience has been decidedly different than yours. My unit appears to be very much a rush job and there are significant fit & finish issues with the place. In addition, when I took my keys last week and went into my unit, there was additional damage done to the unit post-PDI. In addition, the AC does not appear to be working and I've been told that the blinds order is delayed. Floor to ceiling windows + no blinds/AC means my unit was over 100F when I walked in for the first time. I am supposed to move in before the end of the month, but there are still too many outstanding issues as far as I'm concerned. As you mentioned, the construction process was a massive shitshow from the day I wrote the cheque. Over a year in delays from my original contract date and close to 3 years under construction and I have about 4 emails from the developer in that timeframe.

Unless they actually spend the time and effort to clean up this mess over the next while, it seems to me like they scrambled to get people keys before 30-Jun.
 

ilovehighrises

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I had the Pdi done and there are so many deficiencies. They put the wrong colour cabinets on!!!! I chose a lighter shade grey for the cabinets and they gave me a dark grey almost black finished look for it instead. I spoke to the helpful lady at orchard and she also agrees that the colour is not the same as what I chose because she had helped in the past with showing the colours of the cabinets. Also, i upgraded over hang of the granite countertop by 10" and paid extra for that, so you can put stools underneath the granite. And of course, they messed that up as well and have to replace the whole new granite countertops. Like cmon, they rushed my place like crazy these construction workers are the worst. And the people at head office are even worse than that because they give two shits about the actual purchasers finished product! Im emailing them today to see what they can do for me, but Im pretty frustrated after looking at the mess of my new home.

Also, any of you notice how they cheap'd out on the fob security in the elevator? There is no need of fob access, anyone can go to anyone's floor. Where's the privacy? I spoke with the concierge and the PDI guy and the lady at orchard regarding this issue, because what brand new high-rise does not have this kind of basic peace of mind security where you have to fob up to get to your floor. All three agreed with me that this needs to be put in, you guys need to speak up the more ppl that complain about these issues the more we will actually see results get done.

I believe it is important our elevators have fob access to each floor considering there are several ways of entering the building via the back lane entrances and the building is right next to a bottle depot with homeless people "duh" I don't know what they were thinking. Seriously.
 

UrbanWarrior

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I believe you're assuming all of us our purchasers in this building. The vast majority of us are not. In fact, you may be the only one on here who is. This is an urban development forum, we are just urban development enthusiasts. We have no grounds to contact Lamb Developments and demand a fob security system be put in place.
 

Always_Biking

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I believe there are three purchasers here on the forum. @zerileas @crisp and @ilovehighrises

From what I've seen and heard, deficiencies for new buildings and houses are the norm these days. It's a matter of how bad, and also how the developer deals with them. Hopefully these get fixed properly and promptly.
 

UrbanWarrior

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I figured there was at least one more, I didn't realize we had four total though! That's pretty cool. Hopefully not everyone gets f*cked by Lamb though.
 

crisp

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Will definitely look into the fob access and raise my concerns.

I haven't been back into the building since my PDI, any news on the blinds? My deficiencies luckily were not major, will see how they treat them though for my final verdict.
 

ilovehighrises

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Sorry, I do realize this forum isn't just of those people who are living in this building, I thought there were more people on this page that had purchased at 6th and tenth. But I just wanted to let whoever did purchase with lamb be informed. Thanks for your time.
 

longng86

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Hello all, Im a 6th and tenth purchaser. AND Im pissed. I had to create an account to let out my concerns.

To those who looks for investment, STAY AWAY FROM THIS BUILDER/LAMP. Unless you have load of money to sit around doing nothing. To my very own experience. Put down 15% for 2 years, then delay 3 years, to 4 years. At basically zero interest you earned. When its time to rent out, you signed lease agreement with the renter based on the builder date of occupancy (100% finished). Moving in date is now set. Occupancy date is here, and the place you call HOME is still under construction. Your mortgage started, because LAMB wants our money ASAP, but your renter can't move in because its not livable. Then you pay for mortgage, interest, condo fee (not alone condo fee went up from 0.47 to 0.58, huge jump due to inflation they said...bullshit), and can't collect renter's money since they can't move in. IT IS A TOTAL LOSS for straight 4 years.

To those who are looking to call this home...Its a frustration to get to your home. They moved my PDI inspection date 3 times, moved my occupancy date 2 times. And everything is still a mess. Went to my first PDI, my HOME is still in construction stage, can't even start a deficiency list. Reschedule PDI, went in second time, everything is still not done. Abit less dust because they know im doing an inspection SECOND TIME. Big holes in ceiling, door not put up, main door lock is stuck, wrong color on cabinet doors, and crooked, can't close, balcony door can't lock, backplash damage, electrical plugs loose and crooked, nails stick out in bedroom, baseboard cut in wrong spot for the door....ect; bassically everything you see is everything on the list of deficiency. My occupancy is now here, pick up keys, went up to my HOME, NOTHING was dont, absolutely NOTHING.
To my understanding: PDI date is set for you to inspect after the uniit is completed. Then put together a deficiency/touch up list. NOT THIS CASE
Occupancy date is set for you to MOVE IN, after minimum 1 week to fix up the deficiencies. NOT THIS CASE.

My best beautiful condo is filled with frustration. Not mention its even worse when you need something from the builder, you reallly reallllly have to try hard and multiple requests to get, but most being ignored. Before you buy, the builder stays at front of you acting the nicest ppl on earth. After you buy, they builder is now behind you and walk away from you. You signed, you took the risk, now up to your fate.

A joke from my friend, "since you paid so much for the condo in such small space, I hope at least it will come with Tylenol" lol
 

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